On January 2, 2019, The Economic Times rang in the New Year on a cautiously hopeful note and writer Atmadip Ray stated, “After many false hopes over the past few years, there appears to be a new dawn for the banking industry in the year 2019\. The pitch is somewhat ready for a long innings, although there could be occasional bouncers either from the government in an election year to win votes, or a financial calamity from shores far away.”

And what did he base this estimation on? He believes that regulatory moves will curb excesses in the Indian financial world and also that the resolution of corporate stressed assets might help to unclog the system. He also thinks the bad loans formation could slow down, and cites the Reserve Bank of India's latest Financial Stability Report, stating that gross bad loans would slide in fiscal 2019, a first since 2015.

And what is the imagined icing on the cake, for this analyst? Well, the success of the three-way merger of Bank of Baroda, Vijaya Bank and Dena Bank! His assessment is one of many diverse voices on the subject we will be talking about today. We have covered this issue when it was first announced.

On this edition of Digging Deeper, we will address the momentous merger and try to make sense of the fine print and just what it entails. Are bank mergers an effective solution? What is the precedent for it? Did it work for SBI? These are some of the questions we will tackle on this episode of Digging Deeper with Moneycontrol.

Tata Motors Ltd: Buy| CMP: Rs.183.05 | Target: Rs 198| Stop Loss Rs.176| Return 10%

The stock has given a falling wedge breakout on the daily frame which suggests that the optimism in the stock has increased significantly and the trend has reversed now.

In addition, the stock price has moved above the 50-EMA for the first time in the last four month. On the daily chart, the momentum indicator RSI (14) is in positive crossover and rising.

Traders can accumulate the stock in the range of 180-185 for the target of 198 and a stop loss below 176.

ITC: Buy| CMP: Rs.290.40 | Target: Rs 312| Stop Loss: Rs.279| Return 7%

On the daily chart, it can be observed that price has given a symmetrical pattern breakout which indicates a price may move up in the short-term as the trend has revered.

On the weekly frame, the stock has moved above its recent consolidation pattern. The momentum indicator RSI (14) is in positive crossover and rising on the weekly frame.

Traders can accumulate the stock in the range of 287-292 for the target of 312 with a stop loss below 279.

SPARC: Buy| CMP: Rs.186.50 | Target: Rs 209| Stop Loss Rs.177| Return 12%

The stock, after a sharp correction, is seen to be consolidating at the lower levels. The momentum indicator RSI (14) is in the oversold zone for a prolonged period; in addition, it is in positive divergence with the price with the price which suggests a reversal in the price may be witnessed in the short term.

Traders can accumulate the stock in the range of 184-187 for the target of 208 and a stop loss below 177.

The bulls continued to dominate D-Street as benchmark indices ended higher for the fourth straight session in a row, thanks to global cues. So what was the reason – well, trade talks between US-china ended on an optimistic note which boosted investor sentiments.

The S&P BSE Sensex rallied 231 points to finally close above Mount 36K at 36,212 while Nifty50 reclaimed 10,850 to end at 10855. 

The broader market underperformed benchmark indices as the ‘BSE Midcap’ and ‘BSE-Smallcap’ ended lower by 0.04% and 0.2%, respectively.

A steady rise in crude oil prices which are now hovering around $60/bbl could act as a headwind for Indian markets apart from earnings. December quarter is seasonally seen as a slow quarter for India Inc., suggest experts. 

On the macro front, World Bank in a report said that India’s GDP is expected to grow at 7.3 percent in the fiscal year 2018-19, and 7.5 percent in the following two years, attributing it to an upswing in consumption and investment.

The bank said India will continue to be the fastest growing major economy in the world. China’s economic growth is projected to slow down to 6.2 percent each in 2019 and 2020 and 6 percent in 2021.

THE DEATH OF ICAI AS WE KNOW IT

What a smart recovery that was by the bulls! Not only did they manage to pull benchmarks out of the negative zone, the rally ensured a strong close after Wednesday’s session.

The Sensex recovered over 350 points to close above 36,000-mark, while the Nifty recovered over a percent from the day’s low to close above 10,850-mark.

A rally among banks, automobile companies as well as consumption names aided sentiment on D-Street. Axis Bank, in the financials segment, led the gains for banking stocks.

The day began on a positive note, tracking global cues and trends on SGX Nifty. However, the market were off their highs by afternoon. Some selling among metals weighed on the market. By the penultimate hour, the markets had dived into the red. Following steady earnings from IndusInd Bank, the market staged a sharp recovery.

Titan Company Limited: Buy| Target: Rs 1025| Stop Loss: Rs 885| Return 9% 

The stock has taken support at its 100-days exponential moving average (EMA) on the daily charts and took a V-shaped recovery from 870 levels to once again reclaim the momentum above its short-term moving averages.

From the last six weeks, the stock has been consolidating in a broader range of Rs 870-945 along with consistent buying at lower levels.

This week, we have observed a fresh breakout in prices above the key resistance level of 945 along with positive divergence in secondary oscillators. Traders can accumulate the stock in the range of 935-945 for the upside target of 1025 levels and a stop loss below 885.

Indian Bank: Buy| Target: Rs 278| Stop Loss: Rs 240| Return 9%

The stock made a double bottom pattern around Rs 210 levels on the daily charts and bounced back towards 250 levels once again.

This week we have observed a fresh breakout of last three weeks consolidation along with a breakout above the ascending triangle pattern on daily charts. Traders can accumulate the stock in a range of 255-257 for the upside target of 278 levels and a stop loss below Rs 240.

Repco Home Finance Limited: Buy| Target: Rs 471| Stop Loss: Rs 390| Return 12%

The stock has given breakout, after a prolonged consolidation of more than two weeks along with price rising above its 100 days exponential moving average on a daily interval.

On the broader structure as well the stock is also building up a “W” pattern on the technical ground which is again a bullish signal. So, traders can accumulate the stock in a range of Rs 420-430 for the upside target of Rs 471 levels and a stop loss below Rs 390.

Nifty managed to recoup 10800 levels on a closing basis and closed above most of the short-term and long-term moving averages on Monday. A big thumbs up to the bulls.

Coming to the final tally – the S&P BSE Sensex rose 130 points to close at 35,980 – yeah, just a shade below 36000\. For the Nifty, the index closed 30 points higher at 10,802. 

Sectorally, PSU banks remained in limelight. NiftyBank rose more than 200 points on account of improving NPA resolution along with capital infusion. Apart from that, healthcare and Telecom index rose 1 percent.

Technically, on the downside 10628 for Nifty is important critical support. Traders are advised to remain positively biased as long as Nifty50 trades above 10700 on a closing basis.

Benchmark indices showed smart recovery in last couple of hours of trade and ended volatile session on a positive note on Tuesday, driven by global cues. Banking & financials, auto and metals stocks helped the Nifty close above 10,800 levels.

The 30-share BSE Sensex recovered more than 200 points from day's low to close 130.77 points higher at 35,980.93 while the 50-share NSE Nifty gained 30.40 points at 10,802.20.

Overall the market has been rangebound for last few sessions and investors turned cautious ahead of corporate earnings season which will be kicked off later this week by IndusInd Bank, Infosys and TCS, experts said, adding globally the trade meeting between US and China will be closely watched.

For the last 8 weeks, the Nifty is moving in a schizophrenic manner. Every alternate week, it is moving in opposite direction. During the first two session of the last week, Nifty formed a double top at 10923 levels and moved southward.

The Nifty has been moving in a rising wedge pattern on the daily chart. Last week, the index managed to close above the support level of the lower trend line of the wedge and ended the session with a bullish “Hammer” candlestick pattern on the daily chart.

Last week’s high of 10,923 resulted in to lower top against the previous high of 10985 registered on 19th Dec 2018\. If we see daily charts, Nifty has been forming lower tops and higher bottoms.

This means that the move of the Nifty is getting contracted gradually in a Symmetrical Triangle. This setup indicates that very soon we would see one sided move with momentum.

Any level above 10924 would lead to a higher top preceded by higher bottom and that would trigger short coverings in the index.

However, level below 10628, which happens to be the recent bottom, would violate the bullish setup on the short-term charts.

Short term moving average of 8-days has been trading above the 21-days moving average, which indicates short-term uptrend for the Nifty.

As far as Bank Nifty is concerned, it has been outperforming and it seems that it will continue to outperform. Private as well as PSU banking stocks are looking convincing on the charts.

Support for the Bank Nifty spot index is placed at 26900, while resistances for the same are seen at 27650 and 28400.

To conclude, Nifty is contracting its moves and is likely to give one-sided move with momentum soon. Any level above 10924 would trigger short covering, which could push Nifty towards 11300 target. However, longs should be protected with stop loss of 10628 on closing basis.

Well, there were no Monday blues for sure but the way market witnessed selling pressure at higher levels suggest that we might not be out of the woods.

The domestic market gained on back of positive global cues led by dovish comments from the Fed and strong US jobs data. Initially, the gap-up opening pushed the index above 10800 in morning trade but towards the close, we saw profit taking at higher levels.

The final tally on D-Street – Sensex rose 155 points to close at 35,850\. The index did reclaim Mount 36K but failed to hold on to that level. The Nifty50 index ended 44 points higher at 10,771\.

Sectorally, consumer durables, telecom and realty sectors rose over 1% each while selling was seen in healthcare, metal, and capital goods index.

Sensex gainers: Tata Motors, Acix Bank, Bharti Infratel up 2-3%

Sensex losers: Dr. Reddy’s, Bajaj Auto, Indiabulls Housing Finance fell 1-4% respectively

The rupee closed 4 paise higher at 69.68 level compared to the previous close of 69.72\. The rupee clocked a 9.23 percent fall during 2018.

On the institutional front, FPIs were net buyers in India market of Rs 736 crore while DIIs were net sellers in Indian markets to the tune of Rs 141 crore, according to provisional data.

Experts feel that the roller coaster ride would continue for some time and the beginning of earnings season would further accentuate the erratic swings.